With some effort, REDI shows cooperation brings great things
Media reports might lead you to believe our civic organizations rarely get along, but nothing could be further from the truth.
One of the best examples of cooperation that has brought great benefit to our area is Regional Economic Development Inc., or REDI. A successful experiment that sprang from economic development efforts, REDI was created in 1988 in response to a need for greater cooperation in economic development activities among the city, the county and the business community.
Prior to the 1950s, the city wasn’t interested in pursuing diversified economic development efforts. With this in mind, the Columbia Industrial Development Corp., or CIDC, was formed in 1950. Primarily under the leadership of the Chamber of Commerce, the CIDC worked to bring “good” industry to Columbia. The group formed a for-profit corporation that purchased land near the railroad tracks on old Route B, on what is now Brown Station Road.
According to Don Laird, who wrote a master’s thesis on the subject, the problem with this approach was that the University of Missouri and local banks were not involved in the process. However, the group was successful in helping to bring some companies to Columbia, such as 3M, Square D, Textron, American Press, Uphonor, Mid-State Distributors and Clow Pipe Co. Laird says some key members of CIDC formed the Route B Development Co., which purchased adjoining land to keep the area industrial. The owners included Tom Allton, B.D. Simon, Alex Estes, Orville Hobart (who later became mayor) and John Epple. These companies wanted a new Route B and preferred the land east of the road rather than that to the west, so we eventually got the new Route B we know today, and that’s where most companies set up shop.
In the 1950s and 1960s, the Chamber of Commerce took a lead in economic development. In the 1970s and early 1980s, however, neither the Chamber of Commerce nor the CIDC, which would eventually shut down in 1993, was in good financial shape. Wanting to make sure Columbia had a viable chamber, the city purchased a couple of memberships and budgeted $20,000, an amount that was later reduced to $10,000 by the City Council, that the chamber could use to encourage senior citizens to move to Columbia. The city also issued some industrial revenue bonds in the 1970s to spur economic development but did not defer taxes for companies.
It had become clear that economic development required strong city involvement if we were to be successful in attracting new industry to Columbia. So in 1975, when I was public works director, the city council directed that the city manager’s office handle economic development duties. Bob Pugh was mayor, and Terry Novak was city manager at the time. Bob Black, assistant city manager from 1973 to 1987, was given the job of working with the Missouri Department of Economic Development, consultants and others.
The 1980s were not the best economic years for Columbia. After experiencing a recession in the early part of the decade, we were still in the midst of very tight budgets and doing our best to do more with fewer resources. After I became city manager, Bob Black left, and we needed to fill his economic development function.
In working with the companies we had brought here, I had learned that it was important for the city to work closely with industries considering locating in Columbia. I received visits from those who strongly believed the city needed to be in charge of economic development as well as from representatives of the chamber who thought it would be better for the business community to take charge of that function. Both sides had good arguments, so I sought a compromise. I did not advertise Bob’s position immediately, but I collected feedback and tried to find a way to please both sides with some kind of partnership arrangement.
Charlie Digges Jr. and Bo Fraser helped lead a committee formed by the chamber to develop some ideas. The stakes were high, and the clock was ticking. We wanted to form some sort of compromise arrangement, but professional economic development consultants told me that if we farmed this function out, it had better work or we might be shooting ourselves in the foot.
In meetings with the chamber, led by Richard Mendenhall, we discussed forming a corporation of city and chamber members, with the involvement of the county and the university. I then took the idea to the city council, whose main concerns were whether it would work and how much it would cost. I told the council that REDI’s executive vice president would also be the official economic development director for the city, to ensure close coordination with the city manager and its department directors. REDI employees would remain city employees while working directly for the new organization. If this program did not work out, we could revert to the previous system. After public discussion, the council approved legislation to formalize the agreements needed to launch REDI.
We calculated how much we were currently spending, about $150,000 for economic development salaries and activities, and then we looked at how much revenue could be brought in through memberships in the organization.
The new organization that emerged as REDI would combine and coordinate the strengths of the chamber, the city and the county and would promote a regional approach to economic development. We leased space in the Walton Building so that chamber people would be easily accessible when companies visited Columbia. Mayor Rodney Smith, County Commissioner Dave Horner and City Councilperson Mary Anne McCollum were strong influences on the infant organization. McCollum worked hard to create its bylaws.
REDI’s articles of incorporation as a not-for-profit were filed March 14, 1988. The first meeting of the core group, the “Class A” investors, was held April 27 at the Walton Building with Mary Anne McCollum, Tom Gray, David Horner, Ernie Gaeth and me present. The original Class A members were the chamber, the county and the city.
In addition, 50 Class B investors joined that first year, each contributing $1,000 for membership. Originally a Class B member, the University of Missouri-Columbia requested and received Class A status the following year. Duane Stucky, assistant chancellor at the time, held the university seat that Gerald Brouder, Pat Morton, Kee Groshong and Jackie Jones would assume later.
The board of five, including me, quickly expanded to eight in August 1988, after the addition of three Class B members, and to 11 in 1989. A 12th seat on the board was added when the university became a Class A member. Today, the REDI board of directors includes 12 seats and an ex-officio board member who reports on technology transfer issues: Jim Coleman, vice chancellor for research at the University of Missouri-Columbia. While there are still four Class A investors, the Class B membership has grown to 95. In addition to Gaeth, Gray, McCollum (who had recently been elected mayor) and me, the first enlarged REDI board included Class A members Gerald Brouder and David Griggs and Class B members Bo Fraser, Ray Jones, Mildred Knowles, John O’Shaughnessy, Jeff Smith and Hank Waters III.
We chose Bill Watkins as our first executive vice president, REDI’s leadership position. Bill had been an intern with the city and had held major city posts and an economic development post elsewhere, and he is now our city manager. After Bill became assistant city manager in 1996, Rick McDowell took the REDI leadership post, and the title was changed to president in 1998 before Vicki Pratt assumed the job in 2000. Bernie Andrews, the current REDI president, assumed the post in 2003.
One of REDI’s first projects was to develop a master plan for economic development for the region. It has since been updated with broad-based community involvement. This plan is formally adopted by REDI, the city, the county and the chamber of commerce when it is updated periodically.
Amazingly, the REDI experiment has worked really well. The prime contact for the Missouri Department of Economic Development and site consultants from around the world, REDI allows for community involvement in economic development, provides a good communication vehicle between the government and the business community, marshals resources and shares the responsibility with the city manager’s office.
REDI’s structure is still unusual today, according to Bernie Andrews, who says he is aware of no other organization with the same cooperative structure between a city’s government and its business community.
At the beginning, we expected the controversy that a decision of this magnitude usually brings on, but we had the backing of the community and no real opposition. The organization has now grown to a budget of $449,000 for economic development activities.
REDI has been a major player in helping to ensure a continually favorable economic base for the city and the community. And it shows what can happen when people work together for the common good.